Federal immigration agents launched an audit of the 21-store Mi Pueblo supermarket chain in mid-August after hearing complaints about suspected illegal immigrant workers, the company announced Friday.

The audit of I-9 forms, known as a “silent raid,” was the reason the San Jose-based grocer voluntarily joined the federal E-Verify system a short time later to check the immigration status of all new hires.

U.S. Immigration and Customs Enforcement has audited more than 6,500 worksites nationwide since 2009, but “most companies choose not to talk about it because it is confidential,” said company lawyer Julie Pace. She led a news conference Friday to dispel rumors she said were spreading fear and division.

The announcement comes days before a threatened boycott is to begin at noon Monday, led by a union trying to organize Mi Pueblo’s more than 3,000 workers and demanding that the company stop using E-Verify.

The union said Friday it is backing off on the E-Verify demand amid news of the ICE audit but is proceeding with the boycott because Mi Pueblo refuses to sign a labor agreement. Supermarket workers are even more upset about how this was handled than they were before, said Gerardo Dominguez, campaign coordinator for the Justice for Mercado Workers Coalition. It is seeking to unionize thousands of workers at Latino and Asian groceries around the state.

“People are very anxious, very nervous, very upset,” said Dominguez. He said one worker recently quit because he was feeling too much stress.

In a video shown to employees earlier this week, Mi Pueblo founder and CEO Juvenal Chavez revealed the audit for the first time and said he would have to dismiss any workers found to have invalid work documents.

“The possibility of losing one of our employees will hurt my heart,” he said, according to a transcript of the video obtained by the union and translated into English from Spanish. “And it will feel like losing a family member.”

Labor activists have faulted Chavez, a U.S. citizen who is himself a former illegal immigrant from Mexico, for betraying the Latino immigrant community that sustains his business, but the company has fought back the attacks on its reputation and hired an Arizona legal team and immigrant rights activist Lydia Guzman to help manage the crisis.

Pace, the lawyer, spoke to reporters Friday in front of posters depicting what she called “immigration reform butterflies” that emphasize the need for the “left wing” and the “right wing” to come together.

“Companies get caught in the middle” of immigration enforcement stings and the audits have particularly hurt Latino businesses, she said. It could take months or more than a year for the government to complete its audit, she said.

The government can fine companies for hiring illegal workers, but Case said it is not a crime for the company to hire workers who used counterfeit forms that looked genuine.

“We can’t discriminate” or scrutinize workers just “because they have brown skin or speak Spanish or have a Spanish surname,” she said.

Chavez, a former janitor, founded his first Mi Pueblo in 1991 and built a chain across the Bay Area and into the Central Valley. City leaders have lauded Mi Pueblo for revitalizing shopping centers with its festive supermarkets and bakeries.

The chain’s original East San Jose store at King and Story roads was bustling Friday morning. Most shoppers said they were unaware of the immigration problems or the boycott plan.

As he pushed a cart out of the store, shopper Carlos Carranza, 19, said he had not heard of the boycott but he faulted the government for any hardships the audit brings to workers.

“The company has nothing to do with it,” the San Jose resident said. “They’re just doing their job.”

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